House prices still rising
29 July 2004
House prices rose by 2.1 per cent during July, the biggest monthly gain since February, new figures reveal.
The Nationwide Building Society reported that UK house prices are now up around 20.3 per cent on the same time last year, the highest year on year increase since May 2003.
Nationwide said the increase outstripped its expectations and dismissed figures of a housing market downturn, claiming the increase reflected price gains in affordable areas. The average UK property now costs £154,229, according to the Nationwide survey.
"July's increase outstripped our expectations that prices would rise in the 0.5 - one per cent range for the rest of the year, and appears to have been driven by continued buoyancy in the more affordable sectors and regions of the market," said Nationwide group economist Alex Bannister.
He added that Nationwide was sticking to its forecast that prices would rise by 15 per cent for 2004 as a whole, but said the building society would be reviewing its prediction in coming months.
The latest house price data is likely to concern Bank of England officials, who are keen to slow down Britain's booming housing market and prevent a crash. The figures will fuel predictions that the Bank's Monetary Policy Committee (MPC) will raise interest rates next week to 4.75 per cent.